About 260 shocked workers have been told they will lose their jobs as a result of a multi-national car component maker's decision to shut down its Coventry factory.

About 260 shocked workers have been told they will lose their jobs as a result of a multi-national car component maker's decision to shut down its Coventry factory.

Nastech, part of the Japanese NSK group, makes steering systems mainly for European vehicle manufacturers.

Over the next 12 months it will close down its Coventry production line and transfer some work to a sister plant at Peterlee in the north-east.

The company blamed the Coventry closure decision partly on the high value of sterling against the euro and David Garner, corporate communications manager, added: "Demand has fallen for some of our steering systems and this has made them unprofitable."

After the announcement to the Coventry workforce, one worker told the Evening Telegraph: "This news is devastating. It hasn't really sunk in yet with most people here."

The company is expected to bring in "professional outplacement advisers" trained to counsel workers.

The closure decision is yet another blow to Coventry's troubled manufacturing sector. Less than three weeks ago, Novem, which produces car seats, announced more than 200 redundancies.

Two years ago Nastech moved from a factory in Torrington Avenue, Coventry, where it had formed an alliance with the former Torrington Company, to a new custom-built plant at the Gallagher Business Park at Holbrooks.

Bosses then said they had chosen to stay in Coventry because of the area's skilled engineering workforce.

But the rescue strategy ran out of steam and, last October, senior directors of the NSK Group called for a major review of UK operations as European demand for car components started to decline and some older designs of steering column mechanisms became obsolete.

The review resulted in the decision to close one of two factories at Peterlee and the phased closure of the Coventry manufacturing operation. All steering systems work was then to be concentrated in the remaining Peterlee factory.

Although the Coventry manufacturing activity will end, a team of skilled engineering staff will remain to provide customer service.